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Is MCS-accreditation worth it?

Posted by Tasha Kosviner on 17 September 2014 at 9:01 am

We’ve noticed that some installers of solar thermal are now offering to fit solar hot water systems outside existing quality assurance schemes.

One installer is claiming to be able to save their customers up to £2000 by not putting their installation through the rigorous accreditation process required by the microgeneration certification scheme (MCS).

MCS requires proof of a certain standard of workmanship both from installers and from the technology themselves. The scheme is designed to guarantee you a system that works and a route to redress if something goes wrong. Accreditation is also required if you wish to claim government cashback through schemes such as the renewable heat incentive (RHI).

But some installers are arguing that the costs associated with accreditation, particularly for customers wishing to claim RHI, are so onerous that they are pushing the price of solar thermal beyond the reach of many customers and forcing installers who opt for accreditation out of the market.

"Government incentives, far from driving the market, are making the market totally unsustainable for companies," says Roger Budgeon, of Gloucestershire-based installers GreenShop Solar. "The stop, go flat out, stop again plus the cost burden (which the unsuspecting customer is paying) is wrecking the market. The government should raise awareness and drive the low carbon technologies through legislation not short term financial inducements."

So how much is the burden of MCS actually costing the householder? 

A lot, claims Roger. “[Installing outside of the MCS scheme], using the same equipment, solar collector, tank and controls, the end user price is £1200 to £2000 cheaper," says the GreenShop Solar website

“[This is] because there are no MCS/RHI legislation paperwork requirements - no green deal report, no EPC [energy performance certificate] report, no company MCS certification or registration costs. In fact the job and work are exactly the same, the only difference is we have removed the burden and associated expense of the accreditation supporting paperwork!”

But others dispute Roger's claims, saying the cost to businesses - and therefore the amount that should be passed on to customers - is actually likely to be much lower. 

Stuart Elmes, founder and chief executive of solar panel manufacturers Viridian Solar, has unpicked the costs of a solar thermal installation that has MCS accreditation and qualifies for RHI compared to one that does not. You can read his detailed comparisons here. He calculates that a small business making just one installation a year could end up paying £1955 extra costs for that installation.

However, due to the one off, upfront nature of some costs to installers, Stuart finds that the cost per installation rapidly diminishes as a business makes more installations. If the business makes 12 installations a year, or one a month, the extra cost is £373 a job and for 100 installations, it’s £252 per job.  

Naturally the microgeneration certification scheme dispute GreenShop Solar's claims as well.

"It would appear that the statement made is suggesting that the installer company has to off-set all their costs against one installation," says their interim CEO, Gideon Richards. "In reality many installations may well be the combination of solar thermal with another RHI related technology, e.g. biomass and solar thermal.  Also the costs borne establishing the company as an MCS quality installer are spread across all the Solar Thermal installations over the year and life of the certification."

Whatever the size additional costs, and no-one is suggesting there are none, the customer ends up footing this bill. So, assuming your installation qualifies for RHI, will your extra costs be offset by RHI payments or not?

Paul Barwell, CEO of the Solar Trade Association, of which Greenshop Solar is a member, says emphatically, ‘yes’.

“We urge consumers to be very cautious of statements such as [Greenshop Solar’s],” he says. “By paying a tiny fraction extra up front, customers get all the extra security on the transaction that comes with MCS certification and renewable energy consumer code (RECC) membership, not to mention cash flow from RHI payments that will far outweigh the ‘extra costs’ of MCS and RHI admin. The Green Deal assessment only costs £100-150, whereas for a six person occupancy the RHI payment would total £3,000-3,500. Even for a two person home it would be £1,000-1,500. We do understand that MCS requirements can be burdensome for installers, which is why we are regularly in touch with MCS about ongoing improvements to support the industry. Opting out of MCS and RHI is definitely not the right way forward.” 

And there are other benefits to using an MCS-accredited installer and product. 

"All MCS installers and products are rigorously assessed against technical standards and the installer companies must abide by a Trading Standards Institute approved consumer code to maintain their ongoing certification, ensuring that they are working to a high standard and appropriately without mis-selling or misleading the consumer," says Gideon. " MCS has been designed to support a growing industry by providing robust standards, and thereby giving companies an advantage in a competitive market place."

 

Photo Credit: Tony Roberts via Compfight Cc

 

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Comments

8 comments - read them below or add one

Graham Marshall

Graham MarshallComment left on: 17 October 2014 at 8:12 am

From the perspective of the customer I'm glad I read this thred. I will now be comparing the non-accredited supplier and using old fashioned methods of accreditation - checking with previous customers for one - to help me accredit my supplier. The only winner in these paper chases is the bureaucrat. Unless we resist the escalation in non productive bureaucracy we can look forward to a future where filling a form will e the only thing in life which is important. 1984 has been with us for a long time now; could Huxley have even contemplated the Big Brother we now deal with, I doubt it.

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Tasha Kosviner

Tasha KosvinerComment left on: 25 September 2014 at 3:22 pm

And another comment , this one from Bruno Prior

Managing Director at Forever Fuels Limited

Top Contributor

No. Only if it is required for RHI. It is of little practical value. The wood heating industry is going to develop an accreditation scheme for its sector that is actually useful. Other sectors may well be wise to do the same. ENplus shows that an industry-developed scheme is better than a tick-box exercise imposed by the Greater Bureaucracy.

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Tasha Kosviner

Tasha KosvinerComment left on: 25 September 2014 at 1:19 pm

A comment from a reader on LinkedIn: 

 

"Without [MCS] the whole industry would be dead in the water these technologies are new enough to us the installers never mind our customers it would be carnage without some sort of strict quality control."

 

Michael Valovin

Director at AV Commercial & AG Energy

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Tasha Kosviner

Tasha KosvinerComment left on: 24 September 2014 at 2:56 pm

In addition to posting here, installers can add to the debate via the Solar Trade Assocation whose solar expert Chris Roberts has written a white paper, Is MCS fulfilling it's potential? Well worth a read. 

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Stuart Elmes

Stuart Elmes from Comment left on: 24 September 2014 at 2:33 pm

In response to Roger Budgeons comments:

The original premise of this blog was an article published by Greenshop Solar saying that it wasn't worth the customer paying the extra costs of an RHI accredited installation compared to the benefit they would recieve in income from the domestic RHI.

If, instead of the installer having to absorb the RHI costs (as Roger's response now suggests he thinks would be necessary), we return to the original claim then the installer would add the additional costs of RHI accreditation (plus 20% to maintain gross margin) to the price of an RHI installation compared to a non-RHI installation.

 

The price of the RHI installation therefore rises by £323 compared to the non-RHI one - far, far less than the RHI payments which are likely to be in the range of £1,500 to £3,000.

Roger may disagree with my estimate of costs, but they would have to be out by a factor of 5-10 for the claims in the original article to bear up.

 

 

 

 

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Stuart Elmes

Stuart Elmes from Comment left on: 24 September 2014 at 2:15 pm

I think at the heart of this debate is a critical difference between renewable heating technologies and renewable electricity technologies, which the MCS does not acknowledge.

There is no real benefit to installing a wind turbine or PV system at the same time as e.g. re-wiring a property, but there's a significant cost benefit to installing solar thermal at the same time as replacing a hot water cylinder or upgrading a heating system.  Consequently the market structure could be very different. 

 

The PV market is populated with 'PV installation companies' that specialise in marketing and installing this technology.  If all you do is install PV, then the requirements of MCS are not especially burdensome in relation to the turnover it generates.

 

The renewable heating market could be made up of renewables heating installers that do nothing else, but what's clear from the many comments that Tasha has posted is that it could also be made up of many heating engineers that should be encouraged to offer their customers heat pumps, biomass and solar thermal.  The burden of MCS paperwork and compliance is massive when considered against the relatively small number of installations that a modestly sized heating company might do among all the other works they carry out over the course of a year. 

 

In my opinion, MCS should have a good look at either:

 

1/ reducing the burden of admin for smaller companies that carry out less than a certain number of installations per year

2/ finding some way to allow a small company to purchase 'accreditation' from an MCS registered business without complex sub-contracting requirements.

 

 

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Tasha Kosviner

Tasha KosvinerComment left on: 24 September 2014 at 1:44 pm

Roger Budgeon from GreenShop Solar, quoted in the blog, has written to me to dispute Stuart Elmes' maths. He says:

"Stuart Elmes has taken the legislator and large company approach looking at the RHI problem starting with the end user price. He should have taken a business analysis approach to the problem. Whilst I still think he has underestimated all the installer costs in his calculations, also he has not considered the extra costs the manufacturers or importer/distributors have to include in the solar system materials price to cover their accreditation requirements. This increases the solar materials price.

"Just considering it from the point of view of an SME installer who does, say, 50 solar thermal installations a year (one/week), then taking a business approach to the costs using his figures we get:

"Taking an nominal labour cost for a typical installation, not considering variables such as whether a hot water cylinder is already in place etc, of say - £1000, add a materials profit of approximately 20% - around £398 – so a gross margin not considering wages or costs, is around £1398/installation.

"So for an SME installer doing 50 MCS installs a year using Stuart Elmes' figures (which in my opinion are an underestimate) the MCS costs are £269/installation.

"This is 20% of our gross margin before even wages and costs are considered! This is a considerable amount of company fixed costs!

"The government wishes to drive low carbon technologies so it needs to involve the complete range of businesses not just multi-nationals. Any comprehensive plan to achieve this must include local tradesman and SMEs as well. As Stuart Elmes points out the best time to drive this forward is when the tradesmen are doing other work in the building they can raise the low carbon issue to the customer, so they need to be involved.

"As for quality control and assurance the best and longest proven method is to use a local installer, known by reputation and quality. I do agree that a certain level of knowledge and competence need to be accepted in order to understand what is trying to be achieved by the installation of low carbon technologies. National quality standards need to be there to safeguard the purely price driven consumer from companies unknown to the consumer by reputation, non local, sometimes even non UK companies who offer a “fantastic value for money deal”!"

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Tasha Kosviner

Tasha KosvinerComment left on: 22 September 2014 at 6:01 pm

Quite a response from our members about what MCS means for their businesses:

"In response to your e-mail, I would confirm that we have dropped MCS accreditation for PV and will drop MCS accreditation for Solar Thermal in December when our renewal is due.  We are doing this because of the onerous regulation, increasing amounts of paperwork, and increasing registration costs.  We have been in the solar industry for 30 years and find this a sad state of affairs."

"We have dropped out of the MCS totally, with the big guns buying power and volume of jobs mopped up its just killing my business as they can have one accreditation to cover a large workforce making it much more viable.
Another accreditation body squashing the small guy, we had accreditation with ECA, ELECSA, MCS, REAL and Trustmark to name a few, work is all price driven and not really quality driven in this cut throat industry now, nothing is engineered now, it's all installed on the minimum you can get away with to cut costs."


"Already left MCS for solar thermal and air source heat pumps, too expensive for the small business and onerous! Solar thermal market is dead!,havent fitted one in 2 years so why should I pay MCS annual fees! Joke!"

"You will certainly have opened a flood gate with this question!

I have been installing under MCS guidelines since 2009.  The spate of recent changes to requirements across the board is completely over the top.

I too have seriously considered “is it worth it?”  We are accredited for Solar Thermal, PV and Heat Pumps and the paperwork and increasing accountability is enormous as the process becomes more scientific and mathematical.  Jo Blogs the plumber can no longer handle what is being asked for.  Despite manufacturer design departments reassuring him/her that the system will work, now the installer has to ‘prove’ that it will work – Hot water calculations, Compliance Certificates, more regulations, constant changes, extremely detailed quotes to be dispatched before the job is even guaranteed.  It has to put up the cost of installation otherwise we are working for nothing and taking a huge responsibility for it."

"So is it(MCS) worth it?  No.

It is not compulsory for renewable installers to be accredited with MCS

Multinationals will dominate the market as bureaucracy is their “thing”. They will set the prices, but not necessarily the standards.  Their buying power usually means the local installer just cannot compete on price

Additional overhead costs – MCS membership, annual inspections, maintenance of Quality Management System paperwork, hours of work preparing quotes before even the job is won

The local micro installer whom the customer trusts will be squeezed out of the industry either because they tried to comply with MCS and couldn’t compete or they just don’t want to, or can’t take on the additional bureaucracy, make a living and stay sane. 

The cowboys will find a way around the system – they always do."

"I had to re-sit my Solar Thermal exams last month as required every 5 years.  The group of students I was in the classroom with were not MCS accredited, but they were local installers keen to embrace new technology and offer their customers a little something extra. When they realised what was required of them to install under the MCS guidelines and RHI requirements  they were totally despondent. There is no way these capable conscientious installers would join MCS.  hey were plumbers not administrators managing a Quality Management System for a “sole trader”. They do not have the time to embrace the hours of office based paperwork and additional design requirements on top of a full day of manual labour?

These potential installers will most likely work outside MCS regulations as there are no legal requirements to be accredited.  They will be able to install at a cheaper rate than an MCS accredited business and I reckon they will have quite a few customers prepared to pay a cheaper price up front rather than wait 7 years for a piddle to come back via RHI, which is another bureaucratic saga. 

The “looser” in this instance will be the small MCS accredited business who is trying to meet the ever changing standards set by boffins far removed from the day to day reality of daily life as plumbers."

"MCS was a good idea, it tried to raise standards like Gas Safe, but it is not compulsory.  In trying to justify itself it has gone too far and it is in danger of being abandoned."

 

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